What Was Old Is New Again
9-11 changed everything, including e-commerce.
JOHN BEDNEL
TECHNOLOGY EDITOR
Everything changed on September 11, 2001, including the fortunes of e-commerce on the Internet.
What will that mean for trucking?
HDT asked three experts. All head companies that provide online services to the trucking community. All three companies were digital business pioneers.
Jim Davidson, CEO
NTE
Downers Grove, Ill.
www.nte.com
NTE began life as the National Transportation Exchange in 1994, a year before Netscape's commercial web browser software made the Internet something we could all understand. NTE created a market for unused capacity on truckload trailers, selling that capacity to shippers by computer.
In more recent times, NTE has broadened its scope offering menus of transportation options to shippers and freight sources to carriers. NTE brings shippers and carriers together in an open, public market and in private exchanges restricted to companies with established relationships.
Now, as in the beginning, NTE buys transportation from carriers and sells it to shippers. The company earns a portion of the revenue.
A Fresh Look At E-Commerce
"The day of 9-11 obviously we saw things kind of come to a halt," said Jim Davidson of NTE.
Davidson, who was in New York the day of the terrorist attacks, made his way back to Downers Grove two days later.
"We actually saw a lot of people go to the Internet to look for contingency plans. I think people were looking for security, to see that (the Internet) was still working, that there were still trucks available," he said.
Transactions remained low for about two weeks, but now people are looking at the Internet differently, according to Davidson. "The whole economic lay of the land has changed," he said.
Immediately before September 11th, Davidson explained, Internet e-commerce seemed to have lost its popular luster. "I think we all saw the heyday 18 months ago, when if you had an 'e' in front of your name, everybody wanted a seat at your table," he said.
"Then it went to the exact opposite. No one wanted to have dinner with you."
Davidson said people now are taking a fresh look at opportunities on the Internet, which in a slow, uncertain economy are beginning to look good again. The reason, he explained, is that e-commerce providers can help reduce per-transaction costs without a big up-front investment.
"In a down environment where companies have systems and people in place to handle a certain number of transactions, when there are fewer transactions, the per-transaction rate increases," he said.
"In the fleets it could be the same number of people running the same number of lanes, but instead of being five-eighths full, trailers are only two-thirds full."
"When you go back to the cost of managing a transaction through the supply chain, it is probably more today that it was two months ago. I think that's what the supply chain and transportation professionals are faced with," said Davidson.
Some are also faced with personnel cutbacks that require creative ways to get the work done.
According to Davidson, businesses have new, serious reasons to explore the transportation management potential of the Internet.
So, despite a faltering economy and the shock of September 11, NTE is still growing.
"We actually have more customers than we had the month before," he said. "We had more business in October than we had in September.''
Marc Cameron, Chief Operating Officer
Transcore Commercial Services Group
Beaverton, Ore.
www.dat.com
Early this year Dallas-based Transcore bought DAT Services from the Jubitz Corp., of Portland, Ore. Transcore supplied transportation technology to government and business customers. DAT was the first and still is the largest freight-matching system in North America.
DAT Services began at the Jubitz Truckstop where available loads were posted for the convenience of drivers seeking backhauls. DAT's scrolling TV monitors spread to truckstops across the country. Then Jubitz found new, more effective ways of distributing its growing lists of loads. DAT began using phone, fax and computer technologies.
In recent years, DAT warily dipped its toes into the Internet. But the company finally took the plunge last year, launching what it called DATconexus, an online exchange based on DAT's vast load-matching resources. After the sale of DAT to Transcore, DATconexus became the Transcore Exchange.
Transcore Exchange hosts both public and private exchanges, as well as online business tools for negotiation and transaction implementation — right up to, but not including, payment. That's between shipper and carrier. Transcore makes its money from set transaction and subscription fees.
Private Trading Comfort Zone
"The events of September 11 shocked everyone, including the trucking economy," said Transcore's Marc Cameron.
"Freight volumes all over the country went down to a standstill for a day or two. Then it started gradually building back. What we're observing now is that it's a lot more unpredictable than it once was and it's pretty much following the consumer confidence trends."
According to Cameron, business on the Transcore Exchange has become at bit more urgent in nature.
"Everyone's trying to manage inventories now because of working capital. They have been reordering plant shipments on traditional cycles, but when they notice for some reason consumer demand depletes certain supplies, they need that shipment a lot faster," he explained.
"So we're noticing that our customer are wanting to get information of a very specific nature very quickly. Speed is the name of the game today. It always has been, but I have noticed that since nine-one-one the speed of communications is really important to the trucking community.''
For the immediate future, Cameron sees increasing interest in private online trading groups as opposed to public transportation markets.
"The companies with whom we have traditionally done business want to have those trading community environments. People don't want to do business with people they don't know," he explained.
"In the transportation community we're seeing a lot of our customers want to set up private trading groups with their trading partners. We provide the web tools to do that."
Meanwhile, Transcore Exchange business has returned and grown.
"I think the telltale number is the companies that are coming into our system," said Cameron. "September and October show the fourth-highest numbers of the year. Growth in year-over-year total postings is in the 11-to-12% range."
Scott Moscrip, President
Internet Truckstop
Fruitland, Idaho
www.truckstop.com
Internet Truckstop was the first load matching service on the web when it debuted in 1995. Since then, Internet Truckstop has stayed with its relatively simple, clearly successful method of bringing shipper and trucker together, but leaving negotiations, transactions and the exchange of money entirely to them.
That doesn't mean Internet Truckstop technology has remained stagnant. On the contrary, the site has continued to innovate, bringing load-matching to higher levels of efficiency. Most recently, the company added a visual search tool called PINTAC, which enables site users to view available freight and resources geographically.
Internet Truckstop earns its keep through subscription fees.
An Eye on Washington
"The only thing that plunged for us on September 11th, 12th and 13th was the number of phone calls we were getting," said Scott Moscrip of Internet Truckstop.
"A lot of the calls we get are customer service calls, people having a little problem who need help. We didn't get a lot of those."
Phone calls from people applying for the service were down also, he said.
"But the people using the service, even the amount of usage on the service was fairly constant.''
Nevertheless, Moscrip keeps a wary eye on Washington, D.C., and possible disruptive attempts to improve security.
"There are some procedural changes the government could make that would adversely effect e-commerce," he said.
"For example, if the government as a security measure said you couldn't have any electronic documentation, that it all had to be handled via paper so it couldn't be hacked or changed. There are things like that they could do that would be really disruptive," said Moscrip.
Moscrip said he was unaware of any actual proposal. "The government is pro-business right now," he said.
In fact, he said, the government has so far refrained from further harming an already battered e-commerce community.
"The Internet has gone through its dot com meltdown. The decision to not start taxing things, goods and services on the Internet — or taxing the Internet itself — has been a very good thing. If a tax was going into effect, say on the first of next year, it would make the meltdown we have now absolutely heinous," he explained.
Moscrip doesn't see a significant long-term e-commerce impact from the September 11 attacks. But the economic slump that began well before September 11th is another matter.
"We do not see an upturn in the economy in the next six months. We haven't seen a precursor in transportation that that's going to be the case," he said.
